After decades of buying energy from private companies, the Ugandan parliament recently tabled a bill to have exclusive rights with the Bahraini energy company Vitol. Under the bill, Uganda will be the sole buyer of this company’s oil, and this change intends to avoid the supply chain issues with their current sellers. As a market worth $1.6 billion for Uganda, this landlocked country might be better off importing to reduce costs. The aforementioned private companies are disappointed with this deal, as they claim that it will cause an oil monopoly.
It’s difficult to write about economic actions in African countries without mentioning the development that comes with it. With nearly 41% of the population in poverty, skyrocketing prices at the pump serve to harm the civilian population in terms of labor and living costs; this deal will hopefully bring some relief to the country. While it’s hard to quantify how much less they’ll be paying with trade, one can hope that the money that would’ve otherwise been spent on oil could be put forth towards improving the living conditions of Ugandans. Because the Ugandan National Oil Company (UNOC) will sell products to petrol station operators, this deal is one of the many reasons that trade is beneficial between countries–with both parties getting something at a lower cost, why not? For these reasons, a deal like this appears to have been inevitable. It might also cause a strengthening in relations between the countries not just economically but perhaps politically if a conflict were to occur in each state.
In class, we’ve spoken about how hegemons set state norms and rules for all other countries to follow. While Bahrain is nowhere near becoming a hegemon, it’s important to see the connection between Uganda and Bahrain, with Bahrain being one of the most developed countries in the Middle East, and Uganda being far less developed. Poorer, third-world countries tend to flock to more powerful countries to engage in more or less one-sided relations and get more out of it than the other.